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By Root 933 0

at Port Newark on Tuesday and delivered in Stuttgart, Germany, in less time than it once would have taken to be loaded aboard a ship such as the Warrior. Yet time still matters. By one estimate, each day seaborne goods spend under way raises the exporter’s costs by 0.8 percent, which means that a typical 13-day voyage from China to the United States has the same effect as a 10 percent tariff. The time savings represent a huge competitive advantage to shippers located near a major port. Those served by smaller ports may have to endure longer wait times between ships or shuttle links to a larger port, adding time, and hence costs, to every shipment. Air freight all but eliminates the costs of time, but it is too expensive for most goods that are made in poor countries precisely because little value is added in their production.10

“Any change in technology,” the economist Joel Mokyr observed, “leads almost inevitably to an improvement in the welfare of some and to a deterioration in that of others.” That was as true of the container as of other technologies, but on an international scale. Containerization did not create geographical disadvantage, but it has arguably made it a more serious problem.11

Before the container, shipping was expensive for everyone. The most expensive part of international freight transportation, loading cargo aboard ship, affected all shippers equally. Containerization has reduced international transport costs for some much more than for others. Landlocked countries, inland places in countries with poor infrastructure, and countries without enough economic activity to generate high demand for container shipping may have a tougher competitive situation now than they did in breakbulk days. Being landlocked, one study calculated, raises a country’s average shipping costs by half. Another study found that it cost $2,500 to ship a container from Baltimore, on the U.S. Atlantic coast, to Durban, in South Africa—and $7,500 more to haul it by road the 215 miles from Durban to Maseru, in Lesotho. Within China, the World Bank reported in 2002, transporting a container from a central city to a port cost three times as much as shipping it from the port to America.12

And if high shipping costs, high port costs, and long waiting times do not leave a country at an economic disadvantage, a cargo imbalance might. Relatively few routes, it turns out, have an evenly balanced flow of maritime exports and imports. When the flow is out of balance, shippers in the more heavily trafficked direction have to pick up the cost of sending empty containers back in the other direction. In 1998, nearly three-quarters of the containers sent northbound from Caribbean islands to the United States were empty, resulting in much higher shipping costs for the southbound imports of food and consumer goods on which these island-states depend.13

The revolutionary days of container shipping were over by the early 1980s. Yet the aftereffects of the container revolution continued to reverberate. Over the next two decades, as container shipping began to drive international freight costs down, the volume of sea freight shipped in containers rose four times over. Hamburg, Germany’s largest port, handled 11 million tons of general cargo in 1960; in 1996, more than 40 million tons of general cargo crossed the Hamburg docks, 88 percent of it in containers, and more than half of it from Asia. The prices of electronics, clothing, and other consumer goods tumbled as imports displaced domestic products from store shelves in Europe, Japan, and North America. Low-cost products that would not be viable to trade without container shipping diffused quickly around the world. Declining goods prices in the late 1990s, thanks largely to imports, helped bring three decades of inflation to an end.14

Container shipping, it is clear, has helped some cities and countries become part of the new global supply chains, while leaving others to the side. It has assisted the rapid economic growth of Korea while offering precious little to Paraguay. Yet the trade patterns